President Trump told Reuters on Wednesday that the "two Kevins," National Economic Council Director Kevin Hassett and former Federal Reserve Governor Kevin Warsh, were his leading choices to replace Jerome Powell as Fed chairman. He may have narrowed it down to one Kevin. At a White House event Friday, Trump said he wants to keep Hassett, who regularly defends Trump's economic policies in TV appearances, in his current role, the Wall Street Journal reports. "I see Kevin's in the audience, and I just want to thank you. You were fantastic on television today. I actually want to keep you where you are, if you want to know the truth," Trump said.
Trump then turned to chief of staff Susie Wiles and said, "We don't want to lose him, Susie. We'll see how it all works out." Friday's remarks immediately boosted betting-market odds that Warsh will get the nod, the Journal reports. Interest-rate futures also shifted, with traders slightly dialing back expectations for a June rate cut, which would come at the first Fed meeting overseen by a new chair if one is seated right after Powell's term expires in May. Other names in circulation include Fed governor Christopher Waller and BlackRock executive Rick Rieder, with Trump saying this week he could decide within weeks.
The search unfolds against the backdrop of a criminal probe into Powell, tied to whether he misled Congress about Fed building renovations. Two Republican senators say they will block any nominee until the widely criticized investigation is resolved, and Powell has called the probe part of wider efforts to pressure the Fed to cut rates. Trump has already vowed not to choose anyone who disagrees with him on lowering rates, raising concerns among lawmakers and on Wall Street that the next Fed chair could appear too closely aligned with the president.
Some financial industry figures have argued Hassett is already perceived as too close to Trump to reassure bond markets, while allies of Warsh have been quietly lobbying for him. One Trump adviser tells the Journal that the favorite "sort of depends on the day." In the Reuters interview, Trump said he doesn't have any immediate plans to fire Powell because they're in a "little bit of a holding pattern with him." Asked about criticism of the investigation by senators who could block his choice for Powell's successor, he said: "I don't care. They should be loyal. That's what I say."
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